How Much House Can I Afford?

Two common rules of thumb give a quick starting range. Lenders may approve you for more, but these rules keep the payment comfortable.

The 28% rule

Keep your total housing cost (principal, interest, taxes, and insurance) under 28% of your gross monthly income.

Keep all of your monthly debt payments, including housing, under 36% of your gross monthly income.

Example: on $100,000 a year ($8,333 a month), 28% allows about $2,333 for housing, and 36% allows about $3,000 for all debt payments.